Macroeconomic effects of public-sector unions

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2015, vol. 29, issue 2, 101-126

Abstract: Motivated by the highly-unionized public sectors, the high public shares in total employment, and the public-sector wage premia observed in Europe, this paper examines the importance of public-sector unions for macroeconomic theory. The model generates cyclical behavior in hours and wages that is consistent with data behavior in an economy with highly-unionized public sector, namely Germany during the period 1970-2007. The union model is an improvement over a model with exogenous public employment. In addition, endogenously-determined public wage and hours add to the distortionary effect of contractionary tax reforms by generating greater tax rate changes, thus producing higher welfare losses.

Keywords: fiscal policy; public sector labor unions; public sector wages; public sector employment (search for similar items in EconPapers)
JEL-codes: E62 J45 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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https://www.econstor.eu/bitstream/10419/144533/1/A ... or_unions_LABOUR.pdf (application/pdf)

Related works:
Journal Article: Macroeconomic Effects of Public-Sector Unions (2015)
Working Paper: Macroeconomic effects of public-sector unions (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:144533

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